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Politics : View from the Center and Left
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To: Wharf Rat who wrote (217024)2/14/2013 7:09:25 PM
From: Steve Lokness  Read Replies (2) of 541645
 
<<<<< Krugman was right... austerity kills>>>>>

Actually no, Krugman was wrong. He said that by now Greece would be out of the EU and that the EU would be unraveling.

Now if you really want to give credit to Krugman for having a faster paced economy from borrowed money - well of course. It's like taking out a big mortgage during the housing bubble and spending that money on all kinds of shit. Does that lead to a temporary more robust economy? Of course. But then at some point that money has to be paid back - like paid back to the SS trust fund when us old farts want our SS check. When that becomes necessary for whatever reason - the economy shrinks. That is the whole story about living beyond our means. NOW, if that borrowed money can be invested wisely like it was in Germany and Spain for renewable energies - then an argument can be made that it makes some sense. But sooner or later if you have borrowed too much you run up against a wall - like Europe is experiencing now. America does not borrow our money to invest in the future such as Spain and Germany did. ..........Krugman wants to play the board game of Monopoly and revert back to separate currencies in Europe (well he claimed it would already be occuring). By reverting back to play money you can save one currency by devaluing - but that is a game in and of itself and has its own precarious ending. ......Short term you can stimulate an economy as suggested by Keynes, but when it becomes a way of life - a way of giving us what we demand without paying for it - then the ending will not be fun. There is no free lunch Wharf - there just isn't no matter how much we want to believe there is.........
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